Thursday April 25, 2013

KEITH WHITCOMB JR.

Staff Writer

BENNINGTON -- To reach its goal of cutting $5 million from its operating expenses, Southwestern Vermont Health Care has reduced its staff by the equivalent of 40 full-time employees.

SVHC Spokesman Kevin Robinson the changes have happened gradually since November when the health system first announced it would be cutting the $5 million. The losses have mostly been in reduced hours and positions being left unfilled, but incentive packages have also been offered to encourage employees to move on.

"There have been some people whose positions have been reduced and eliminated," said Robinson. "We try very hard when that happens to look for other positions in the health system."

Robinson said no physician positions have been eliminated.

The health system is still about $1 million shy of its overall goal and is in a constant state of change with an eye toward making its operations leaner and more efficient, said Robinson. The federal government has also reduced Medicare payments, which will cause the hospital to lose about $1 million in revenue, said Robinson.

According to Barry Lampke, director of external for the Vermont Hospital Association, the 2 percent reduction in Medicare hit Vermont's hospitals for a total of $12.6 million.

Robinson said the cuts to Medicare are from the federal sequestration but that is only one example of things the health system has to be mindful of when managing its money. Another is the Medicare Dependent Hospital Program which Robinson said is available to hospitals who have more than 60 percent of their patients insured by Medicare. He said for those hospitals any small change to Medicare reimbursement can affect the entire business model so the program offered some padding to absorb hits. The program was slated to be shut down late last year by Congress extended it and as part of the sequestration deal has extended to the end of this fiscal year.

If the program is not continued it could cost SVHC between $1.5 million and $2 million.

These are the immediate things the health system is looking at but the entire industry is in a state of flux in terms of how payments are made, said Robinson, meaning SVHC has to be flexible.

There have also been less people seeking outpatient care, he said. While the hospital is moving towards a business model that uses more outpatients there have been less people seeking those services. Robinson said one theory to explain this is that the economy has caused more people to move on to high deductible insurance plans which encourage those on them to put more consideration into getting medical procedures.

He said this is part of the transition the health care industry is seeing. Health care is moving away from a fee-for-service model towards one that rewards keeping patients healthy.

SVHC includes Southwestern Vermont Medical Center and is the area's largest employer. It has an annual revenue budget of $160 million.

Contact Keith Whitcomb Jr. at kwhitcomb@benningtonbanner.com or follow him on Twitter @KWhitcombjr